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Metro Vancouver’s housing affordability was stable in the second quarter of 2014, with some very specific projects affecting the numbers in some areas, statistical analysis provided to The Vancouver Sun shows.

In the Strathcona Village development, suites are selling at $500 to $530 a square foot, which improves overall affordability in the city of Vancouver, the second-quarter instalment of the UDI/FortisBC Housing Affordability Index shows.

But next quarter, which will include the launch of Vancouver House, the twisty tower designed for the space between two Granville Bridge on-ramps, affordability will likely decrease because units may be marketed for as much as $1,500 per square foot, said Michael Ferreira, managing principal at Urban Analytics, which provides the data for the index.

Because Vancouver is a large city with diverse neighbourhoods and a varied housing market, specific projects, particularly those with many units at either extreme of the price spectrum can affect statistical affordability for a specific time period.

“You don’t tend to see as much of this kind of variance in the more suburban markets,” Ferreira said. “For the most part, those projects are already affordable, so the only way those markets will be affected is if a project comes out that is very large and very luxurious. It’s highly unlikely that anybody would introduce a project like that because the markets don’t justify a project like that.”

While the last instalment of the UDI/FortisBC Housing Affordability Index in the first quarter of 2014 saw improved affordability as some banks dropped interest rates slightly, this quarter the rates are identical at an average of 3.97 per cent on a five-year, fixed-rate term.

In suburbs like Burnaby and Richmond affordability has decreased relative to the last year, particularly for new concrete condominiums, the data show. In Richmond, prices are up six per cent over the past two years, while in Burnaby, there have been some more expensive, taller towers introduced and more condominiums are for sale in popular neighbourhoods like Metrotown, such as Anthem/Beedie’s Station Square II.

Burnaby has allowed higher towers ­— some with as many as 50 or 60 storeys — and units on higher floors tend to be sold for higher prices, Ferreira said.

Areas with the most supply and greatest amount of competition tend to have better affordability, Ferreira said.

“There are some real life examples that show if you do add more supply to the market you will get more competition and as a result prices tend to get softer,” Ferreira said.

Single-family home prices and affordability levels are consistent across the Lower Mainland, except in Vancouver proper, where prices continue to rise and only one-tenth of households in the city can afford the median single-family home.

The index defines “affordable” as the percentage of households living in a region with the income required to qualify for the mortgage needed to own the property. Typically, a bank wants to see no more than 32 per cent of income going to housing if it is to provide a mortgage.

In Vancouver proper, the minimum annual income required to purchase a new unit is $72,126 for a new wood-frame condominium. For a single-family home, the minimum required annual income is $159,410 to buy the median-priced single family home, which costs $1.380 million. Both the prices and the minimum income have increased slightly in the past quarter.

For resale properties, the numbers are a bit more encouraging: the minimum required income for a resale property is $56,016, which would qualify a buyer for a wood-frame condo in Vancouver. Those numbers are down slightly from the last quarter, probably because more affordable projects in East Vancouver, such as Canvas and Midtown, and Cambria on the west side were launched, while the number of units for sale in more luxurious markets such as the University of B.C. fell.

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Affordability stable, with some bumps due to large construction projects

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